The impact of purchase subsidy termination on electric vehicle adoption: a synthetic control approach

Carsten Creutzburg and Leo M. Doerr

Transportation Research Part A: Policy and Practice, 2026, vol. 211, issue C

Abstract: This study provides the first real-world evidence on the effects of an unanticipated termination of Battery electric vehicle (BEV) purchase subsidies in Germany, one of the world’s largest BEV markets. We exploit the abrupt, court-mandated termination of Germany’s subsidy program in December 2023 as a natural experiment and analyze the causal impact of this exogenous policy shock by applying the Synthetic Control Method to monthly BEV registration data from January 2018 to March 2025. Our estimates suggest that the German BEV market declined by approximately 45% as a direct result of the subsidy termination, corresponding to 140,000 BEV registrations that were forgone in 2024 alone. Our findings underscore the critical role of financial incentives in promoting BEV adoption, while also highlighting the importance of clear communication and predictable policy timelines, as abrupt changes pose substantial risks to market stability, decarbonization targets, and government credibility.

Keywords: Battery Electric vehicles; Financial Incentives; Synthetic Control Method (search for similar items in EconPapers)
JEL-codes: C23 D12 H23 Q42 R41 (search for similar items in EconPapers)
Date: 2026
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DOI: 10.1016/j.tra.2026.105035

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